“Due to the debilitating nature of Alzheimer’s and related forms of dementia on your loved one’s ability to make sound financial decisions, the sooner you can get financial matters in order the better.”
If a loved one has been diagnosed with Alzheimer’s disease or any other form of dementia, it is necessary to address legal and financial issues as soon as possible. The person’s ability to sign documents and take other actions to protect themselves and their assets will be limited as the disease progresses, so there’s no time to wait. This recent article “Financial steps to take when dealing with Alzheimer’s” from Statesville Record & Landmark explains the steps to take.
Watch for Unusual Financial Activity
Someone who has been sensible about money for most of his life may start to behave differently with his finances. This is often an early sign of cognitive decline. If bills are piling up, or unusual purchases are being made, you may need to prepare to take over his finances. It should be noted that unusual financial activity can also be a sign of elder financial abuse.
Designate a Power of Attorney
The best time to designate a person to take care of finances is before she shows signs of dementia. It’s not an easy conversation, but it is very important. Someone needs to be identified who can be trusted to manage day-to-day money matters, who can sign checks, pay bills and supervise finances. If possible, it may be easier if the POA gradually eases into the role, only taking full control when the person with dementia can no longer manage on her own.
An individual needs to be legally competent to complete or update legal documents including wills, trusts, an advanced health care directive (health care proxy) and other estate planning documents. Once an individual is not legally competent, the court must be petitioned to name a family member as a guardian, or a guardian will be appointed by the court. It is far easier for the family and the individual to have this handled by an estate planning attorney in advance of incompetency.
An often-overlooked detail in cases of Alzheimer’s are the beneficiary designations on retirement plans, financial accounts and life insurance policies. Check with an estate planning attorney for help if there is any question that changes may be challenged by the financial institution or by heirs.
Cost of Care and How It Will Be Paid
At a certain point, people with dementia cannot live on their own. Even those who love them cannot care for them safely. Determining how care will be provided, whether care can be arranged at home or which nursing facility has the best resources for a person with cognitive illness and how to pay for this care, must be addressed. An elder law estate planning attorney can help the family navigate through the process, including helping to protect family assets through the use of trusts and other planning strategies.
If the family has a strong history of Alzheimer’s disease or other cognitive diseases, it makes sense to do this sort of preparation far in advance. The sooner it can be addressed, even long before dementia symptoms appear, the better the outcome will be.
Reference: Statesville Record & Landmark (April 11, 2021) “Financial steps to take when dealing with Alzheimer’s”